What are the Impacts of Fertility Rates on Housing Markets?

by George Masnick
Senior Research Fellow

Since families with children are primary drivers of household formation and housing consumption, changes in fertility rates can have significant impacts on housing markets. But tracking and understanding those changes can be challenging, as illustrated by two seemingly contradictory high-profile accounts of changing fertility patterns that appeared earlier this year.

First came the Pew Research Center, which in January 2018 issued a report titled "They're Waiting Longer, but US Women today are More Likely to Have Children Than a Decade Ago." However, less than a month later, The New York Times published the seemingly contradictory headline: "American Women are Having Fewer Children than They'd Like."

Is it possible that both headlines were accurate? Is it possible that more women are having children while the overall fertility rate also is trending downward?

Answering these questions requires paying attention to both the measures being used to describe fertility trends and the data source used to measure the trend. Such an approach shows that it is quite possible for more women to become mothers and for all women to have fewer children overall.

Explaining the Trends

The General Fertility Rate (GFR)—the number of births per 1000 women age 15-49—has been trending downward over the past decade, according to the National Center for Health Statistics (NCHS). The drop is due to sharp declines in the number of children born to mothers younger than 30, somewhat but not completely offset by increases in the birthrate for mothers older than 30. Consequently, the total fertility rate has declined (Figure 1).

Figure 1. The General Fertility Rate Has Been Declining Due to Steep Declines Among Young Mothers

Note: Since births to women ate 45-49 are so few, they were excluded from this figure, which makes the GFR line an approximation of the General Fertility Rate.

Source: JCHS tabulations of National Center for Health Statistics, National Vital Statistics System, Data Brief 287, Births in the United States, 2016.

It is noteworthy that, in 2016, for the first time ever, the fertility rate for 30-34 year olds exceeded the rate for 25-29 year olds. In contrast, the birth rate for women in their early 30s was about twice the birth rate for women in their late 30s, a trend that has no changed significantly in the past decade. Fertility rates for women in their early 40s did inch upward over the past decade, but remain at exceedingly low levels (rising from just under 1 percent to just over 1 percent).

What about the increase in motherhood highlighted in the Pew report? Motherhood is measured in that report by the share of women in each cohort having ever had a live birth by age 40-44. While that report indicates that the share of mothers is rising, there are important questions about the magnitude of its reported increase in motherhood. Specifically, the Pew report is based on an analysis of the Current Population Survey's biannual June Supplement, which asks women detailed questions concerning all children they have had over a lifetime. And these CPS data appear to show a significant recent increase in motherhood.

However, comparing the CPS data on the share of older women who have become mothers with vital statistics data from the NCHS suggests that the CPS may exaggerate the recent trend toward greater motherhood (Figure 2). Although the NCHS estimates are only available until 2010, the trends from the two data sources roughly parallel one another and show a sharp downward trend followed by a trend upward. But most importantly, the upward trend in the NCHS data began in 2000 and is more modest (a 2.1 percent increase over a 10-year period), while the CPS upward trend began in 2006 and is more dramatic (a 6.0 percent increase in 10 years). Significantly, most of the upward trend in the CPS since 2006 is accounted for by the change between 2010 and 2012, a period which accounted for more than half of the 6-point gain between 2006 and 2016.

Figure 2. Motherhood Is on the Rise, but Perhaps Not as Much as the Current Population Survey Indicates

Source: JCHS tabulations of US Census Bureau, Current Population Surveys, National Center for Health Statistics, National Vital Statistics System, Data Brief 287, Births in the United States, 2016.

The NCHS percentages of women who have become mothers are higher, partly due to the fact that the NCHS women are slightly older (all age 44), while some of the CPS women (age 40-44) were still having children in their early 40s. The NCHS trend line is also much smoother because it is based on much larger number of people in the vital statistics database.

However, some of the differences are due to measurement errors that produced the lower motherhood shares in the CPS prior to 2012. As a 2015 Census Bureau working paper on this topic noted: "The June 2012 Current Population Survey (CPS) Fertility Supplement data showed a significant decrease from 2010 in the percent of women aged 35-44 who are childless... However, due to numerous changes in data and data processing, it is reasonable to think that some of the apparent changes shown in the data may be artifacts of changes in measurement, not an indication of an actual demographic shift."

We should not be surprised that the more reliable NCHS data show that the percentage of all women age 44 who are mothers has been trending only modestly upward since about 2000. One key factor in this shift is that the percentage of women in this age group who are Hispanic also increased, rising form just over 10 percent in 2000 to just under 20 percent in 2016 (Figure 3). The growth in the share of women in their early 40s who are Hispanic is due to two trends. First, the number of Hispanic women age 40-44 has been increasing, as the younger migrants from previous decades approach middle age. Second, the total number of women age 40-44 has been declining because many members of the smaller Generation-X cohort are now entering their early 40s.

Figure 3. The Increase in Motherhood is Due in Large Part to the Growing Share of Hispanic Women

Source: JCHS tabulations of US Census Bureau, Intercensal Population Estimates and 2016 Historical Series.

This is significant because Hispanic women at the end of their reproductive ages are more likely to have become mothers than non-Hispanics of the same age. Unfortunately, the NCHS fertility data are only available for all whites (including Hispanics) and all blacks (including Hispanics). Consequently, we cannot use the data to calculate motherhood by both ethnicity and race. However, the CPS, which does ask about both race and ethnicity, shows significant racial and ethnic differences in the share of women in their early 40s who have had at least one child. The Pew report, for example, which averaged CPS data for 2012, 2014, and 2016, calculated that 90 percent of Hispanic women in their early 40s had at least one child, compared to only 83 percent of non-Hispanic white women; 85 percent of non-Hispanic black women, and 86 percent of non-Hispanic Asian women.

Potential Impacts

The NYT article emphasized that the fertility decline in the US is consistent with declines in other developed countries; that American women are bearing far fewer children that they would like to; that declines in marriage (and sexual activity among unmarried women), along with increasing use of reliable contraception, are at the root of the fertility shortfall; and that the fertility decline has been widespread throughout the country. Regardless of the reasons, this delay in childbearing could have a variety of impacts not only on individuals, families, and society, but on housing markets as well.

Fewer births to teens and women in their early 20s, for example, should mean that more women are likely to complete high school, pursue higher education, and secure higher-paying jobs. The Pew report describes how the largest increases in motherhood have been among college-educated older women, the group with historically the lowest levels of completed fertility and the highest percent childless. Discounting the fact that these motherhood gains might not be as large as the CPS data indicate, and are partly driven by increases in college-educated Hispanics, such a trend could have important implications for housing demand. College-educated mothers are likely to have higher incomes which means they are more likely to have the financial resources to become homeowners, should the choose, or to rent larger units in locations better suited for growing families.

However, fewer overall births and smaller family sizes could impact housing consumption by making renting more likely or by reducing the demand for larger housing units. Moreover, fewer births will produce a smaller future labor force that may find it hard to support the very large generation of millennials when they reach retirement. If doing so requires higher taxes on young workers, then households may have less disposable income that might otherwise be used to pay for housing.

Regardless of the impact on housing, it is clear that some subtle but significant changes are likely to continue to affect both the overall fertility rate, and the total number of children in the US. The fertility decline would be further exacerbated if, as some policy makers are proposing, the country reduces the number of immigrants allowed to enter the United States, or prioritizes immigrants likely to have fewer children.

Family Instability... It's Not Just Mom and Dad

by Kristin Perkins
Postdoctoral Fellow

Children experience many changes in their households while they are growing up. But while we often think about divorcing and remarrying parents as common changes in household composition that affect many children, in new research, I show that changes involving extended family members and nonrelatives are far more common than changes involving a parent. This finding is significant because prior research suggests that it is likely that instability involving nonparental household members affects children's outcomes. It is therefore relevant to assess the extent to which children are exposed to these transitions and how exposure varies by race and family structure.

To gauge the extent of household changes, I used the nationally representative Survey of Income and Program Participation (SIPP) to track a sample of more than 72,000 children and their households over approximately two years. The SIPP interviews households every four months and documents the set of household members at each interview. This allowed me to identify the relationship between each child and each other household member and to determine who exited or entered the households between interviews.

Overall, by the end of two years (after six interviews), about one percent of children experienced a change in household composition involving their mother and five percent experience a change involving their father. In contrast, more than 10 percent experienced a change involving a grandparent, aunt, uncle, cousin, or other extended family member. In addition, more than four percent of children experienced a change involving a nonrelative. This means that if we think only about divorcing and remarrying parents, we miss changes that affect 14 percent of children over a period of about two years.

These rates vary significantly by type of household, by race, and by ethnicity. For example, 18 percent of children living with a single parent and 29 percent of children living with no parents had an extended family member enter or exit their households compared to only seven percent of children who live with two parents. Similarly, over 10 percent of children living with a single parent or no parent experienced a change involving a nonrelative compared to two percent of children living with two parents (Figure 1).

Moreover, 17 percent of black children and 18 percent of Hispanic children experienced a change in household composition involving extended family members compared to only six percent of white children. There is not as much difference by race and ethnicity, however, for changes involving nonrelatives. Rather, the rate clustered around five percent for all three groups (Figure 2).

Taken together, these findings mean that considering only instability involving parents may not uncover differences by family structure, race, and ethnicity that a broader conceptualization of household instability would reveal. This is important because many studies find that divorce has negative effects on children's well-being. My research showing the much more widespread exposure to changes in household composition highlights the need for future research that assesses whether these other changes in household composition are detrimental—or beneficial—for children. For example: do the distraction and stress from instability involving relatives and nonfamily members mean children perform less well in school or have more behavior problems? Or do some types of changes reflect closer relationships with extended kin that are beneficial for children? Such questions, which were beyond the scope of my analysis, clearly merit further attention.

These descriptive findings and future work on the consequences of household instability for children could also have implications for housing policy. If high housing cost burdens and a lack of affordable options contribute to changes in household composition and if those changes are detrimental to children, then expanding the supply of affordable housing and targeting it to specific households and/or specific high-cost or low-income geographies could greatly help those children. Moreover, such policies could have meaningful spillover effects because providing housing assistance to families not only might benefit children in the family that receives the assistance, but could also help children in the households their families otherwise would have joined when they doubled up with extended family members or nonrelatives.

On the Road Again? After Long-Term Decline, Interstate Migration May be Recovering

by Riordan Frost
Research Assistant

For the first time in decades, the number and share of Americans moving to another state may be rising. Moreover, as our new interactive tools show, the increases are due in large measure to the growing number of millennials and baby boomers who are moving from places like California and New York to places like Colorado, Washington, and Florida.

If these trends continue, they would represent a marked shift in domestic migration patterns within the United States. While the Great Recession brought new attention to the decline in residential migration, this decline began well before the latest economic downturn. The share of US residents moving between states has generally declined since we started measuring these trends in 1948, while the total number of such movers has fallen since the mid-1980s.

The three major data sources for residential mobility—the Current Population Survey (CPS), the American Community Survey (ACS), and the IRS Population Migration data (IRS)—all show notable drops in domestic migration during the Great Recession. After 2010, however, they diverge, with the ACS and IRS data showing an uptick in the number of interstate migrants while the CPS data show a stabilization after a long-term decline (Figure 1). The Census Bureau's Population Estimates Program data on migration is limited to net migration flows, but it's regional net flows corroborate these findings by showing some recover since the recession.

Figure 1. Interstate Migration May Be Recovering for the First Time in Decades (Interactive)

The ACS data show that the numerical uptick in interstate moves appears to be driven in particular by 25-34 year olds, 55-64 year olds, and those over 65. While some of this increase is due to the fact that these age groups encompass the nation's two largest generational cohorts (millennials and baby boomers), some of the increase is driven by the fact that rates of migration have increased overall since 2010, though they declined slightly in 2016 (Figure 2). 

Figure 2. Migration Trends are Stabilizing in All Age Groups (Interactive)

The CPS data, which generally show lower migration numbers and rates than the ACS and the IRS, indicate a stabilization in migration across the board for all age groups after 2010. However, even in the CPS there was noticeable growth in the number and rates of moves among younger people in 2016, particularly 25-34 year olds.

While the IRS data does not include age data before 2012, the post-2012 data offer insights into where people in different age groups leave and where they moved. As one of the new interactive tools shows, states that are attracting individuals across age groups include Arizona, Florida, Nevada, North Carolina, and South Carolina. States particularly attractive to younger people include Colorado, Washington, Georgia, and Texas. Only a few states, notably Delaware and South Dakota, are attracting older individuals in particular (Figure 3).

Figure 3. Many States are Experiencing Age-Specific Trends in Migration (Interactive)

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming 2016 2014 2012

Moreover, as another interactive tool depicting gross migration flows by year and state shows, overall flows have changed dramatically in the last six years. Many states with positive in-migration in 2012, such as Florida, Arizona, and South Carolina, saw even greater in-migration in 2016. In contrast, several states – notably California, New York, and Massachusetts – that had negative flows in 2012 had even greater negative flows in 2016 (Figure 4).

Figure 4. Migration Flows Have Changed for Most States in the Past Six Years (Interactive)

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

While some trends – such as migration to Sunbelt states – are consistent with patterns over the last several decades, there are some notable changes in the flows as well. In the wake of declining oil prices, North Dakota, Oklahoma, and Wyoming, all of which have energy-production-based economies and all of which had been growing, saw net out-migration in 2016. In contrast, Utah was the only state that went from losing residents in 2012 to gaining them in 2016. Indeed, Utah was the fastest growing state in 2016, due in large part to their high birth rate and growing domestic and international immigration.

Looking forward, the question is whether the rise in interstate migration is a short-term change or a long-term fundamental shift that marks the end of the decades-long trend of declining mobility. If it is the latter, the changes could have important implications, from increased labor mobility to changes in housing demand, for the states that are gaining – or losing – residents overall.